The Stahl-Alexeev paradox: A note

Journal Article (Journal Article)

We offer a simple proof of the paradox discovered by Stahl and Alexeev that the introduction of black markets in a fixed price economy with a rationing mechanism consisting of waiting line queues is not necessarily a Pareto improvement. We show that the paradoxical result arises from the fact that queue length is endogenous and illustrates the general principle that permitting an additional market may be undesirable in an economy which has other distortions. © 1988.

Full Text

Duke Authors

Cited Authors

  • Gang, IN; Tower, E

Published Date

  • January 1, 1988

Published In

Volume / Issue

  • 44 / 1

Start / End Page

  • 189 - 191

Electronic International Standard Serial Number (EISSN)

  • 1095-7235

International Standard Serial Number (ISSN)

  • 0022-0531

Digital Object Identifier (DOI)

  • 10.1016/0022-0531(88)90103-2

Citation Source

  • Scopus